NBIX
Neurocrine Biosciences, Inc.
$172.04
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 40.1% below fair value
You pay
$172.04
Bear
$151.43
Fair
$287.37
Bull
$467.30
Bear
$151.43
-12.0%
13% stage 1 growth, 11% discount
Fair
$287.37
+67.0%
22% stage 1 growth, 11% discount
Bull
$467.30
+171.6%
29% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (22% base case)
Terminal Value % of EV
48%
Implied Market Multiple
27.7x
Market is pricing in (growth)
13.4%
vs 22.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $195.29 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $287.37 per share.
Warnings
Stock-based employee pay equals 46% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $195.29 (from 37 analysts). Our estimate is 67% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions